Tankers queue off China’s coast as demand for oil rebounds

Must Read

High performance from Guyana as 2020 half-year discoveries hit lowest in 100 years

Global discoveries of conventional resource volumes reached just 4.9 billion barrels of oil equivalent (boe) in the first half...

‘The worst is behind us’: Analysts see continued recovery for global oil markets

After reaching historic lows in April, global oil prices could continue to chop higher in the coming months as...

Maersk Drilling bags exploration contract for one-well campaign in Suriname

Maersk Drilling has secured a contract for the semi-submersible rig Mærsk Developer which will be employed by PETRONAS Suriname...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

(AlJazeera) Queues of tankers have formed off China’s busiest oil ports as the vessels wait to offload crude for refineries that are quickly ramping up production amid a rapid rebound in fuel demand.

Two dozen or more crude-laden tankers are waiting to discharge at terminals on China’s east coast that supply state-owned and independent refiners in the region, according shipbrokers and vessel-tracking data. Asia’s largest economy is leading a recovery in oil consumption, with demand in May almost back to levels seen before the coronavirus triggered stay-at-home orders.

Chinese refineries are increasing operations to convert more crude into gasoline and diesel after factories reopened and millions of people returned to work following the easing of restrictions. Government policy dictating that the retail price of fuels won’t be cut in line with sub-$40 a barrel oil has also boosted refining margins in the country.

“China’s demand recovery and current low oil prices have prompted refiners, especially the independents, to ramp up crude runs,” said Serena Huang, a Singapore-based analyst at analytics firm Vortexa Ltd. “This crude import momentum could be rolling over to June if refiners’ appetite remain strong.”

The fleet of tankers arrived in Chinese waters during the second half of May and the ships have been idling off ports in Shandong and Liaoning provinces, according to data compiled by Bloomberg. Most of the vessels are Suezmaxes and Very-Large Crude Carriers, which are estimated to be collectively carrying about 4 million tons or more of oil from countries including Russia, Colombia, Angola and Brazil.

Shandong is home to the Qingdao and Rizhao terminals and China’s independent refiners — known as teapots — that have staged a v-shaped recovery. Run rates rose to a record high of about 76% at the end of May, compared with a low of 42% in February, according to industry consultant SCI99.

Meanwhile, the queues might get even longer, with the highest number of supertankers since at least the start of 2017 hauling crude to China from almost everywhere across the globe. Vortexa estimates 158 million to 180 million barrels will be discharged in China over the next 10 days.

“Low oil prices will also be supportive for strategic storage,” said Anoop Singh, who heads East of Suez tanker research at Braemar ACM Shipbroking in Singapore. “This will surely worsen the state of congestion at China’s ports.”

- Advertisement -

Latest News

High performance from Guyana as 2020 half-year discoveries hit lowest in 100 years

Global discoveries of conventional resource volumes reached just 4.9 billion barrels of oil equivalent (boe) in the first half...

‘The worst is behind us’: Analysts see continued recovery for global oil markets

After reaching historic lows in April, global oil prices could continue to chop higher in the coming months as COVID-19 shelter-in-place restrictions begin to...

Maersk Drilling bags exploration contract for one-well campaign in Suriname

Maersk Drilling has secured a contract for the semi-submersible rig Mærsk Developer which will be employed by PETRONAS Suriname Exploration & Production B.V. for...

Crane Worldwide Logistics collaborates with SBM Offshore to ship PPE supplies to Guyana

Crane Worldwide Logistics (CWW) has collaborated with SBM Offshore to ship several thousand gloves and masks to the South American country of Guyana to...

Guyana makes historic presentation to ICJ over border controversy with Venezuela

A battery of international lawyers with key support from Sir Shridath Ramphal presented Guyana’s case to the International Court of Justice (ICJ) on Tuesday...

More Articles Like This